Business update: US entrepreneurial leaders assess Cuba business climate

Wednesday

May 28, 2014 at 6:00 PM

The head of the U.S. Chamber of Commerce toured an auto repair cooperative and talked with newly minted private entrepreneurs Wednesday as part of the first American trade mission of its kind to Cuba in 15 years.

The Associated Press

HAVANA — The head of the U.S. Chamber of Commerce toured an auto repair cooperative and talked with newly minted private entrepreneurs Wednesday as part of the first American trade mission of its kind to Cuba in 15 years.

Chamber president and CEO Thomas J. Donohue led a baker's dozen of U.S. business figures to assess the island's changed business climate under economic reforms that have included an expansion of the tiny private sector, the decentralization of state-run enterprises and a drive to lure badly needed foreign investment.

"We're very pleased to be here," Donohue said. "We're learning a lot about the changes taking place in Cuba."

Washington and Havana have not had formal diplomatic relations since the early 1960s, and the United States maintains a 52-year-old trade embargo against the Communist-run country.

Cuba buys some U.S. food and agricultural goods under an exception to the sanctions, but in recent years has increasingly turned to other countries that don't require cash up-front.

From a high of $962 million in 2008, U.S. sales to the island fell to $509 million in 2012, the most recent year for which official figures are available.

Cuba's calculation is believed to be higher than the simple dollar value of the imports, apparently factoring in embargo-related losses due to unfavorable credit terms, currency exchanges and shipping complications.

Chamber officials said the goal of the trip was to explore not only trade possibilities allowed under the current rules but also opportunities in a post-embargo future.

At the Havana auto body shop, which 10 months ago was converted from a state-run business to an autonomous cooperative, masked workers sanded car hoods and fenders to prepare them for fresh paint jobs as the visitors got a guided tour.

"This new model of association gives you the freedom of self-management, which allows us to do more and make decisions about our resources," co-op president Marcelo Gonzalez said. "Productivity has greatly increased."

Cuban officials say cooperatives are a key element of their drive to boost efficiency without abandoning entirely the socialist principles that have guided the economy for more than a half-century.

About 450 non-agricultural cooperatives are currently in operation and some 455,000 Cubans own or are employed by private small businesses, according to government figures.

Donohue, who has been president of the Chamber since 1997 and last visited the island in 1999, said today's Cuba is "fundamentally different in terms of the number of people that are operating under the private system ... not working for the government."

The trip was criticized by some back home including Sen. Robert Menendez, a Cuban-American Democrat from New Jersey who sent a letter to the Chamber expressing concerns about strengthening trade ties to Cuba.

He alleged that several foreign businesspeople jailed alongside dozens of islanders as part of a crackdown on corruption were imprisoned "without justification," and accused Havana of violating international labor standards and oppressing fundamental human rights.

The Chamber group was meeting privately with small-business owners later in the day and paying a visit to Energas SA, a joint concern between the Cuban government and Canada's Sherritt that operates several gas-powered electrical plants on the island's northern coast.

The delegation included top executives from Minnesota agribusiness giant Cargill and Alticor, the Michigan-based parent company of the direct-sales business Amway.